TaxTMI 
TaxTMI 
1986 (1) TMI 315
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.... not be classified under item 14-G as Oleum was nothing but sulphuric acid. The appellants main plea before the lower authorities was that Oleum produced by them was an intermediate product which was not marketable and, as such, it was intended for captive consumption and being an intermediary product, was not leviable to Central Excise duty. The appellants gave a technical write-up about the process of manufacture of Oleum and its utilisation in the manufacture of chlorosulphonic acid. The position as emerged from the reply was that it was actually sulphur-trioxide which was finally used in the process of manufacture of chlorosulphonic acid and what the appellants had described as Oleum was only sulphur-trioxide. For the purpose of clarity, the process of manufacture as stated by the appellants is reproduced below: "Solid sulphur of 99.5 - 99.8% purity is me.l.t.ed in a Me.l.t.er pit using steam coils. Molten sulphur overflows to a settling compartment for removal of impurities. Settled sulphur is pumped to a sulphur burner which is operated at 900° - 950°C and is converted to sulphurdioxide, on reaction with oxygen in air. This being an exothermic reaction gases are cool....
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....cannot be considered as an item falling under 14G CET. He drew our attention to the Condensed Chemical Dictionary, Page 758 where Oleum has been defined as fuming sulphuric acid. He pleaded that full facts had been placed before the Assistant Collector and the Appellate Collector, but they have not taken note of the fact that it is sulphurtrioxide which in fact is sought to be charged to duty. He stated that sulpfauric acid, Oleum and its anhydride fall under T.I.14G for the purpose of assessment. He has stated that anhydride is sulphur trioxide but the form in which it comes into existence in the appellants unit is not recognised commercially and technically and utilised as anhydride. He stated further that for anhydride of sulphuric add to be in marketable form and for it to be considered as goods, it has to be in liquid or solid form. He gave extracts (photocopy) of pages 242, 243, 758, 982, 983 of the 'The Condensed Chemical Dictionary': Tenth Edition Revised by Gessner G. Hawley. For convenience of reference sulphur-trioxide as described in the Condensed Chemical Dictionary is set out as under: "Sulphur trioxide (sulfuric anhydride) SO3 (SO3). Properties : Exists in three sol....
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....t should be 65% Oleum. The point of contention in the pleading before us betwen the Revenue and the appellants is that while the appellants plead that it is sulphur-trioxide which is released from 30% Oleum is the one which is actually utilised for the manufacture of Chlorosulphonic acid, the end-product manufactured by them in the continuous manufacturing process as claimed, the Revenue contends that the duty is on that component of the weight of the Oleum by which the Oleum gets reduced by the release of sulphur-trioxide from Oleum 30% on its heating and when it gets reduced to the strength of Oleum 20%. The reason given by the Assistant Collector's finding in this regard as set out in paras 13 and 14 are reproduced below for proper appreciation of the view held by the Department. "13. The Oleum in the evaporator after liberating pure SO3 depletes and depleted 20% Oleumreturns to Oleum tower to absorb SO3 5 to 8% strength originating from the sulphuric acid plant which is a cyclic process. In the process depleted Oleum is definitely less in weight than the Oleum drawn from the Oleum boot/tower to the extent it was depleted and contributed to the manufacture of chlorosulphonie ac....
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....hat this weight represents the weight of Oleum which has been used for captive consumption. The Appellate Collector has held that sulphur-trioxide gas is known as 100% Oleum and as its anhydride form and therefore it attracts duty under Tariff Item 14-G. We observe that both the Assistant Collector and the Appellate Collector are agreed in their findings that it is sulphur-trioxide which is the one that reacts to form chlorosulphonic acid. The Appellate Collector has held the same to be chargeable to duty holding it as Oleum and as anhydride form of sulphuric acid. The Assistant Collector has held that it is the Oleum that is fuming sulphuric acid which is captively consumed to the extent of the loss of weight due to the release of sulphur-trioxide from Oleum 35%. From the technical point of view, we do not find that there is any authority to describe sulphur-trioxide as Oleum as held by the Appellate Collector. From the facts of the case, we observe that it cannot be stated that the Oleum has been captively consumed as it is only sulphur-trioxide which physically participates in the reaction after its release from Oleum. The Oleum only acts as a vehicle for carrying sulphur-trioxi....